Alert: Massive French Rip-off in prospect

Aware that the Government’s energy policy is in complete disarray, the French-owned company Electricité de France (EDF), which has half undertaken to build two nuclear reactors at Hinkley Point in Somerset, is launching a bid to virtually blackmail the British government to pass legislation no less to guarantee EDF huge revenues in return for actually building the reactors.

Leaving on one side the fantastic nonsense that EDF actually expect the British consumer to pay for EDF’s reactors in entirety, it’s worth seeing what the actual figures of cost and revenue demanded by EDF actually are.

EDF claim the two unproven Areva reactors will cost £14 billion for a total of 3.2 GW capacity.  At £4,400 per kilowatt, this is about 50% greater than the proven costs of the Westinghouse AP1000 reactors, four of which are being built in China on budget, another four have approval in the USA, and whose original design is actually operating today at Sizewell in Suffolk.

For the privilege of having EDF build two Areva reactors they originally demanded a guaranteed by legislation £165 per MegaWatt hour – no less than four, yes four times, the current average (wholesale) price of electricity which is itself well above what new gas-fired stations will deliver.  At 80% average output, wich would be easy to achieve with the AP1000, the new Areva units should deliver 22.4 TerraWatt hours per year, which at £165 per MegaWatt hour would provide EDF with a revenue of £3.7 billion per year.  Payback on their cost would thus be achieved in under 4 years, a rate of return which make the PFI contracts look good value.  After 4 years all the revenue would belong to EDF for the next 21 years (apparently) with only fuel and maintenance to pay for.  There is only one thing to say to such an offer, or even one at half the price – “No thanks”.

PS        Westinghouse is up for sale as Toshiba is pulling out of the nuclear business.  Here is a chance for Britain to buy back what it so improvidently sold in 2007.

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